- Asset Protection
- Charitable Remainder Trusts
- Education Trust
- Elder Law
- Irrevocable Living Trusts
- Last Wills and Testaments
- Living Wills (Directive to Physicians)
- Medicaid Planning
- Offshore Trusts
- Powers of Attorney
- Revocable Living Trusts
So many people delay creating an estate plan because they don’t think they own enough, are not old enough, or they just don’t want to think about it. It does not matter how large or small your estate is, in either case, there is plenty of unfinished business for your loved ones to take care of upon your incapacity or untimely death. This is why you should take action now to plan your estate.
- First, estate planning provides a road map to accomplish unfinished business. It prevents your family from having to guess or, even worse, quarrel.
- Second, estate planning keeps you and your family’s affairs private. Without a proper estate plan, your family’s matters are sorted out publicly through the probate process.
- Third, you probably also want to control how and to whom your assets are distributed and not leave it up to a probate court to make a public decision for you. An estate plan can help accomplish your goals by you expressing, in writing, who you want to receive your assets and when you would like them to receive those assets.
- Fourth, an estate plan can also include health care directives to give you a voice about your medical treatment when you may not be able to speak for yourself.
- Fifth, you can create an estate plan now, and change it as life goes.
If you are considering creating an estate plan, or would like to update your existing estate plan, we would be happy to discuss your needs.
REVOCABLE LIVING TRUST:
A Revocable Living Trust (RLT) is an effective tool for preserving privacy, eliminating the need for probate and preparing your estate for ease of transition upon your death. The RLT is established by written agreement and records the arrangement wherein you transfer ownership of your property into the Trust during your lifetime. There are 4 main components to a Trust:
- Trustor: The creator of the Trust;
- Trustee: The person/entity who accepts the property into the Trust, and who manages and distributes the property in accordance with the Trustor’s directions;
- Trust Assets: The property transferred into the Trust by the Trustor;
- Beneficiary: Those who receive the Trust assets.
The RLT is created by the Trustor (you), who generally also serves as Trustee, and retains ownership and complete control of all assets transferred. The RLT offers flexibility for you to manage your estate, is revocable and may be amended by you during your lifetime. As Trustor, you are able to transfer the property into the Trust (with certain exceptions), and direct what happens to those assets in the event of your incapacity and/or death. In the event you become incapacitated, your nominated Successor Trustee can manage your assets in accordance with your stated desires, essentially eliminating the need for guardianship, and can manage and distribute your estate upon your death, avoiding the (oftentimes) complex and expensive Nevada probate process.
Funding your RLT is extremely important, and relatively simple to accomplish. You can transfer out-of-state real property into your Trust to avoid the need for a probate proceeding in the state the real property is located.
The RLT can be the beneficiary of certain Life Insurance policies and other accounts, which could eliminate the need for a guardian being appointed for minor heirs, and to avoid certain beneficiaries being disqualified from receiving government assistance. Further, you can stipulate how and when beneficiaries receive their inheritance, [i.e., graduating from college, or attaining a certain age], all the while providing for their health, education, maintenance and support until such time as they reach that milestone. You can also give your Successor Trustee the discretion to withhold certain distributions, based upon a beneficiary’s personal situation [i.e., divorce, bankruptcy, drug dependency etc.]. Here, at Black & Wadhams, we tailor each RLT to suit the individual’s particular needs.
In community property states, such as Nevada, married couples and registered domestic partners can create joint RLT’s. Typically, these Trusts provide for transfer of ownership of all assets to the survivor upon the first death (the assets remain in the Trust), however the Trustors can address issues such as providing for children from prior marriages, and/or concerns regarding estate taxes for estates that exceed the estate and gift tax exemption.
Nevada Statutes also permit a pet owner to set up a Trust to benefit pet(s) following the pet owner’s incapacity and/or death, wherein you set forth your desires regarding your pet’s caregiver, comfort, food, schedule, veterinarian, and the like. The Trust will also name a contingent beneficiary to inherit the balance of your Trust assets upon the death of your last surviving pet. We can assist you in documenting your desires for your beloved pet(s).
The main disadvantage of the RLT is that drafting and funding it is more expensive than executing a simple Will; however, avoiding probate and the potential estate tax savings make the RLT the better investment.
LAST WILL AND TESTAMENT:
In Nevada, whether you die with or without a Last Will and Testament, your estate will be subject to the probate process if your assets meet the statutory limits.
If you die without a Will, Nevada Statute dictates who can represent your estate as Administrator, and who reaps the rewards of your hard-earned assets. These ‘heirs’ may or may not be the person(s) you would like to benefit from your estate and sometimes may be individuals you did not know existed. Conversely, if you have a valid Will, the person(s) you named in your Will are generally appointed by the Court as your Executor(s), and your assets are distributed to your named beneficiaries upon final approval by the Court.
When creating your RLT, we also create a Last Will and Testament, however this ‘Will’ differs from the Will referenced above. This document is referred to as a ‘pour-over’ Will and states that any asset(s) not in your RLT upon your death are to be transferred to your Trust. The Will also sets forth your desires regarding your funeral/cremation, and names a preferred guardian for yourself, your minor child(ren), and/or an individual over whom you are serving as guardian.
Upon your death, your Last Will and Testament is filed with the Court, and becomes public record; however, if your Will is a pour-over Will, and your RLT is the named beneficiary, details of your actual beneficiaries and their distributions typically remain private.
DURABLE POWER OF ATTORNEY FOR HEALTHCARE DECISIONS:
If you get to a point in your life where you are unable to make medical decisions for yourself, it is important to have a Healthcare Power of Attorney. Your HPOA names the individual(s) you have chosen to make medical decisions on your behalf, and to carry out your stated desires regarding life sustaining measures. By nominating an agent and making your desires known, you remove the burden from family/friends of having to make those decisions on your behalf.
DURABLE POWER OF ATTORNEY FOR FINANCIAL DECISIONS:
The APOA allows your nominated agent(s) to make financial decisions on your behalf, and to manage your assets, except those assets that are in your RLT [provisions in your RLT dictate how your Successor Trustee can manage Trust assets].
You can make your APOA effective immediately, or have it effective only upon your incapacity. You can also limit your agent’s powers, or grant them broad powers.
- Cremation Directive. Under Nevada Statute, ’A person may order his or her own cremation and the disposition of his or her own cremated remains. The order must be signed by the person and by two witnesses.’ Accordingly, if it is your desire to be cremated and you do not have documentation in place with a Funeral Home/crematory, it is advisable to execute a Cremation Directive. Failure to do either could result in your family having to petition the Family Court for an Order authorizing the cremation.
- Guardian Nomination. If you were to become incapacitated, you most likely have a preference as to whom you would like to take care of you. Accordingly, you should have a document naming your preferred guardian, which can be a separate document, or have appropriate language in your Last Will and Testament, or Power of Attorney. Holding your assets in a RLT, and/or having appropriate Powers of Attorney for healthcare and financial decisions should eliminate the need for a guardian, however if one does become necessary, the Court looks to who you named as your preferred guardian in your estate plan.